Experienced digital marketing consultant, Arek Estall, discusses whether UK businesses could be missing out by ignoring the franchise business model.
When we hear people talking about starting a business, we usually assume that they are starting from scratch – creating websites, logos and marketing literature to suit a new brand identity and then working to develop that brand.
But there is another option for entrepreneurs.
Franchises are a serious cog in the wheel of the ever turning modern economy. And businesses could be missing a trick by ignoring the franchise business model which is continuously growing and is now worth almost £14bn, according to the British Franchise Association (BFA).
However, like any business model, there are several advantages and disadvantages to choosing to franchise that you need to consider.
In order to understand the benefits, I caught up with Sam Butterworth from Tubz Vending Franchise who shared the following tips:
Franchise companies often deal with the majority of a business’ legal documents and paperwork, giving you more time to focus on growth and making money.
If a business went it alone, it would have no negotiating power with suppliers. Franchises can help you negotiate the best deals, giving your business the ability to make more profit than it would on its own.
Focus on hiring and leading people
By using a franchise, you can focus purely on hiring and leading people, and ultimately growing your business.
Economies of scale
With a scalable franchising model, new branches of your business can be added with ease as profits grow.
Lack of brand and marketing control
Not having to worry about PR and marketing can sometimes be a blessing. But if you’re a “hands on” marketer, you may not relish the lack of control. This means you can’t just change the colour of the logo if you fancy it!
So, is a franchise worth it?
Franchises are a great option, particularly given the current market and the fact that 20% of businesses are expected to fail within the first year of trading, according to Businesszone. The added benefit with a franchise is that you are working to a proven successful business model, meaning that the level of risk is substantially lower. In fact, the BFA reports that 92% of all franchises are profitable.
While a franchise admittedly isn’t suitable for everyone, they are a great option for the “roll your sleeves up” type of entrepreneur wanting to dive straight into the world of business.